GBP

In the UK there were four important
sets of data out yesterday. Firstly, there was the RICS house pricing index
which improved from 57% in October to 58% in November. 

Secondly, we had trade balance
figures. The trade deficit did reduce from -£10.099B to -£9.732B, which was led
by an increase in exports. Although this is a positive figure it came in below
forecasts -£9.35B.

GBP

In the UK there were four important
sets of data out yesterday. Firstly, there was the RICS house pricing index
which improved from 57% in October to 58% in November. 

Secondly, we had trade balance
figures. The trade deficit did reduce from -£10.099B to -£9.732B, which was led
by an increase in exports. Although this is a positive figure it came in below
forecasts -£9.35B.

Thirdly, we had industrial
production figures out which came in above forecast at 0.4% growth month on
month.

Lastly the NIESR released their
quarterly GDP target which showed an improvement from the previous quarter of
0.7% to 0.8%. Interestingly GBP/EUR seemed to drop off quite considerably after
the release of these figures indicating the market may have been anticipating
stronger growth 

What this did for sterling is we saw
it continue its three day gains against the US dollar reaching two year highs in
early morning trading. 

EUR 

Again, data out from the Eurozone
yesterday was mixed. Industrial output figures for France came in worse than
expected at -0.3% against forecasts of 0.1%, whereas in Italy industrial output
grew by 0.5% against forecasts of 0.2%. 

GDP figures also came in better than
expected for Italy, although still not very good. Quarter on quarter there was
no growth against an expected contraction of 0.1% 

Mario Draghi’s speech yesterday
appeared to be a non-event with Draghi criticising Mark Carney’s plans to
tackle asset bubbles, stating that he prefers strict monetary policy. 

USD 

Overnight we had news that the
Republicans and Democrats in the US have reached a deal on the US budget, which
could avert a repeat of the government shutdown that occurred in October. 

The deal would see US$63bn worth of
spending cuts over two years and around US$22bn in deficit reduction. The deal,
should it be finalised this week, will boost prospects for the Federal Reserve
to taper their quantitative easing program, potentially as early as next week
(December 18^th). Tapering of quantitative easing should strengthen the
US dollar. 

Today 

Already
this morning we have had inflation figures out for from Germany, which came in
as expected rising to 0.2%. This should add to the argument that the ECB may
not need to introduce any further monetary stimulus to combat falling inflation. 

Other
than that there is not too much information out today. The Reserve Bank of New
Zealand interest rate decision is out tonight.

Key Announcements: 

12.00pm
– USD – MBA Mortgage Applications (Dec 6): Previously fell by 12.8%. 

20.00pm
– NZD – RBNZ Interest Rate Decision and Press Conference: Expected to remain at
2.5%.